Group accuses DHS of redirecting funds

Thursday

Aug 27, 2015 at 12:01 AMAug 27, 2015 at 5:00 AM

By SHELLY CHANDLER

Home- and Community-Based Services, or HCBS, is a Medicaid program serving about 15,000 Iowans with intellectual disabilities.

There have been tremendous efforts over the course of the past 20-plus years to assist individuals with intellectual disabilities to move out of institutional care and be fully participatory citizens within their community. The Iowa Association of Community Providers worked with state Rep. Dave Heaton, R-Mount Pleasant, and the Department of Human Services during the legislative session and submitted proposed language that would move DHS away from using individual caps on HCBS waiver funding as a mechanism to contain costs. DHS reports to the Centers for Medicare and Medicaid Services and ensures the budget neutrality of the waivers on an aggregate basis, as required by federal law. This provides DHS with flexibility based on the changing needs of individuals receiving services.

Our association asked that language within the Medicaid modernization request for proposals and the Iowa Code be changed to prohibit the use of individual monthly caps on waiver funding (which are not required by federal law). While having this flexibility at the department level, DHS has used individual caps on service funding, which is why we submitted the proposed legislative language to prohibit their use. They are unnecessary (their calculation of budget neutrality indicates they are comfortably meeting the requirement) and contrary to the purpose of having a managed Medicaid system.

DHS assured us during the session it intended to use the aggregate formula only going forward so the managed care organizations, MCOs, would have greater flexibility, and upon their request, we pulled our request for legislative action.

DHS now has promulgated ARC 2097C, which places specific service caps in an attempt to contain costs, in direct conflict with what we were told during the legislative session. Although the rule has just been noticed, providers already have begun receiving emails from case managers indicating services and service rates will be cut as a result of this proposed rule. The primary outcome of this proposed rule is high-need individuals, now being effectively served in waiver programs, will receive less service and will have a higher risk of institutionalization. This is contrary to everything the department has stated.

HCBS has been identified by DHS as the preferred service, with the goal being Medicaid members will be integrated, employed and engaged in Iowa’s communities. Toward this effort, DHS accepted $60 million to rebalance the disparity of funding and services now going to institutional level of care (nursing homes), with the goal of tipping the scales toward HCBS.

Institutional level of care received more than $10 million ($32 million was recommended). HCBS, which serve more than 25,000 Iowans, was appropriated a $1 million increase. DHS has indicated it does not intend to spend the home- and community-based services appropriation as directed because of its deficit. No such indication was given to the nursing home lobby or state institutions. $750,000 was appropriated to increase HCBS to enhance employment opportunities. Director Chuck Palmer informed the Health and Human Services appropriations chairs he does not intend to use these monies as directed.

On Aug. 7, I received the following memo from DHS indicating this rule would be terminated. Several days later, I was notified it intends to move the rule:

“Shelly, we are forwarding this on to the rules editor to pull the ID waiver cap rules.

“The department is terminating the cost containment rule making commenced in ARC 2097C, due to the limited costs saving between the effective rule implementation date and the start of Medicaid’s High Quality Health Care Initiative on Jan.1.”

In summary, IACP opposes this rule based on the stated priorities of the department, previous department actions and the limited savings.

The department accepted $60 million to rebalance its services and funding to the preferred HCBS service away from institutional level of care. The department refuses to spend the very modest funding increases provided toward that effort.

The department now suggests implementing rules that will cut services and cut rates in an effort to contain costs — in direct conflict with the commitment made to legislators and IACP during the session two months ago.

The department indicated in writing the savings are limited.

Our association respectfully requests this rule be rescinded. Cost containment for HCBS can be fully realized through the aggregate cap on spending currently used by the department. Managed care organizations will be provided a limited amount of funds to support individuals in HCBS programs. Managed care organizations will be provided a great deal of latitude with the funds they receive with the expectations being specific outcomes will be achieved.

Shelly Chandler is the executive director of the Iowa Association of Community Providers. This is from a letter she wrote to

the Iowa Administrative Rules Review Committee, which is considering a cap to the monthly waiver for people with intellectual disabilities, a move she opposes. The 10-person legislative committee includes state Sen. Tom Courtney, D-Burlington.

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